Scarlets say a proposed merger with Ospreys is "off the table".
Ospreys stated on Tuesday they were not close to agreeing a merger with the fellow south west Wales franchise as part of Project Reset - a plan to reorganise Welsh domestic rugby.
Initial discussions between the two franchises at meetings of the Professional Rugby Board (PRB) indicated there was a willingness on both parties before Ospreys pulled out.
"Heads of terms were agreed and signed by the Ospreys and Scarlets on 1 March on terms we believe our supporters would be happy with," Scarlets said in a statement.
"This was to be proposed at a meeting of the PRB on Tuesday afternoon, but we were told at the start of that meeting that the Ospreys had changed their mind.
"The merger is off the table."
Scarlets have claimed they were first approached by the Ospreys in December about the option of a merger, which could have led to a new team being launched in north wales to maintain four regions.
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"In late December, the Scarlets received a high-level approach from the Ospreys to explore the option of a merger as they had come to the conclusion that their position as tenants at the Liberty Stadium was proving to be challenging," the statement continued.
"This was discussed at the two-day strategy meeting of PRB on 8 and 9 January.
"The loss of a region would have put Welsh rugby in breach of its commitment to having four regions playing in the major competitions. As a result, the option of a team playing out of North Wales was raised.
"By the time of the next PRB meeting on 5 February, discussions had broken down between the Scarlets and Ospreys, and we were told that the Ospreys and another region were in talks over a possible merger, again with North Wales being the option to maintain four teams.
"Subsequently, those discussions also broke down and we were approached again last week by the Ospreys to reconsider a merger."
Ospreys chairman Mike James resigned over the proposed merger and accused the Welsh Rugy Union (WRU) of "catastrophic mismanagement".
The PRB reacted to the Ospreys' decision with disappointment at the breakdown in talks between the two PRO14 clubs.